What Can We Learn from Wall Street?
I had the pleasure of interviewing Shannon Cross, managing director and co-founder of Cross Research Group, an equity research firm, for an article that will be featured in the upcoming issue of our magazine. As someone who has seen the industry primarily from an independent dealer perspective, interviewing Ms. Cross was a good reminder for me that the industry is dominated by the OEMs—and not even all the OEMs, but the few that are at the top.
What I took away from the interview is that, although the managed print services market is growing at a slow but steady rate, the traditional hardware and supplies market continues to be flat or declining. When you put those two things together, the pie is essentially remaining the same size, while companies fight to increase or maintain their piece of it. Ms. Cross said she values the managed print services market at $7 billion dollars, which is what she believes the revenue being generated by it is. We've seen larger numbers tossed around, but conservative numbers are likely more realistic.
It may be that sales of print- and document-related software and services can replace what we're losing in hardware and supplies sales, but will it be able to grow beyond that? I think maybe it could, if you include any solution related to printing devices, documents, or electronic files, but if and to what extent these could outdo a market comprised primarily of commodity sales remains to be seen.
Ms. Cross confirmed that Xerox and HP are at the top of the MPS market, with no reason to see this changing in the near future. Her words that stood out to me the most were, "the strong are going to get stronger." The good news is that the OEMs, particularly HP, are putting a bigger focus on the channel. With top OEMs recognizing the importance of supporting their distribution chain, I think we should see MPS solutions strengthening in both value and execution across the industry—it may be a slow process, but it will happen, especially in conjunction with the ever-growing availability of MPS resources for the channel that can be found outside of the OEMs.
Our October issue article, "A View from Wall Street," contains Ms. Cross's perspectives on market growth, OEM leadership, mergers and acquisitions, and more. Get your free subscription to The Imaging Channel magazine before the October issue hits. In addition, Ms. Cross will be presenting our second-day keynote at The Imaging Channel Executive Summit, where she will provide an analyst's perspective on the health of our industry and take a look at upcoming trends.
I'm very excited about all of the speakers that will be at the summit, including Tom Gall from Xerox for our first-day keynote, "A New Channel Dynamic: The Top 5 Emerging Trends in Managed Services." Between Ms. Cross and Mr. Gall, this is an event you won't want to miss. Register today.
Posted by Emily Offshack on 09/07/2010